Allen Klein

Klein was born in Newark, New Jersey, the fourth child and only son of Jewish immigrants. His mother died of cancer soon afterward, and Klein lived for a time with his grandparents, then in a Jewish orphanage, until his father remarried shortly before Klein's 10th birthday. An indifferent student, he graduated from Weequahic High School in 1950; fellow graduate Philip Roth was the only classmate to sign his yearbook.

In early work experience with a magazine and newspaper distribution company, Klein showed skill with numbers, and learned about how profits were often concealed from those who had been crucial in generating them. Eventually he realized that much the same situation existed in popular music, where labels routinely took much profit from the transitory careers of the artists who created the profit-generating music, paying them less than Klein thought they should.

Klein enlisted in the U.S. Army in 1951, and served as a clerk typist on Governors Island, New York. After military service, and with the assistance of the G.I. Bill, Klein majored in accounting at Upsala College, graduating in 1957, and was hired by a Manhattan accounting firm, Joseph Fenton and Company. He was assigned to assist Joe Fenton in an audit of a music publishers' organization, the Harry Fox Agency, and several record companies, including Dot Records, Liberty Records, and Monarch Records. In an early setback to Klein's career, Joseph Fenton and Company fired him after four months because of chronic lateness. The company wrote to the State of New Jersey urging officials not to approve him as a Certified Public Accountant, and Klein chose not to take the examination. He briefly attended law school but soon dropped out.

Aided by his friendship with music publisher Don Kirshner, a fellow Upsala College alumnus, Klein worked as an accountant for the next several years, assisted by Henry Newfeld, a CPA who was a friend from school and the Army, and Marty Weinberg, another CPA, under the name Allen Klein and Company. Klein's clients included Ersel Hickey, Dimitri Tiomkin, Steve Lawrence, Eydie Gormé, Sam Cooke, Buddy Knox, Jimmy Bowen, Lloyd Price, Neil Sedaka, Bobby Darin, Bobby Vinton, Scepter Records, and the estate of Mike Todd. A key early contact was attorney Marty Machat, who frequently did legal work for Klein.

In June 1958, Klein married Betty Rosenblum, a Hunter College student seven years his junior. The couple had three children.

In 1977, Klein and ABKCO's former head of promotion, Pete Bennett, were each charged with three felony counts of income tax evasion for 1970, 1971, and 1972, and related misdemeanor counts of making false statements on their income tax returns for those years. The IRS, which had been investigating Klein for several years, claimed that Klein and Bennett had sold promotional copies of Beatles and post-Beatles albums—common practice in the music industry at the time—without declaring the sales on their tax returns. Klein was alleged to have received over $200,000. Bennett pleaded guilty to a single misdemeanor charge and became a witness against Klein. Klein testified that he had not instructed Bennett to sell promotional copies of albums and that although he'd received cash payments from Bennett, they were a return of cash advances Bennett had been given. Klein's first trial ended in a mistrial because the jury was deadlocked. At his second trial in 1979, the jury found Klein not guilty of the felony charges but guilty of a single misdemeanor charge for false statements on his 1972 tax return. Klein was fined $5,000 and sentenced to two months in jail, which he served in July–September 1980.